A UK law firm survey has indicated that over half had insufficient cash on their balance sheets to cover one month’s operating expenses and almost 40 per cent were unable to meet one month’s salary costs.
The fact that so many firms are under-capitilised and face major problems dealing with the Covid-19 pandemic was reported in the UK Law Gazette and based on a survey undertaken by litigation funder Augusta Ventures, covered just 40 LLPs, but the results are disturbing.
Author of the study, Andrew O’Connor, said: ‘The rate of cash burn experienced by law firms during this period will place significant strain on balance sheets.’
To add to the seriousness of the current situation for UK law firms, a further survey last week of nearly 8,000 legal practices by the Law Society suggested that thousands of high street firms could shut within six months because of financial pressures as a result of the crisis.
Cash flow pressures and lower fee income have put more than half of all the legal practices in England and Wales at risk.
“The shock to the legal services sector has been sudden and severe,’ commented Law Society president Simon Davis.
“There are widespread concerns over liquidity as firms face a dramatic plunge in income with work falling away.
“Although a firm may be open for business, this does not mean it is business as usual.
“Residential property transactions have ground to a halt,” the report said.
You May Be Interested
- The $11 Million Club – BigLaw’s Partner Profit Machine Just Broke Another Record — And The 2026 Rankings Haven’t Even Dropped Yet
- Ropes & Gray Raids Latham & Watkins for Eight-Lawyer Paris PE/M&A Team
In a bold lateral strike that underscores the fierce talent battle in Paris Big Law, Ropes & Gray has snapped up a high-powered eight-lawyer private equity and M&A group from rival Latham & Watkins. The move, confirmed by multiple sources including The Lawyer andLaw.com International, brings three partners — Denis Criton, (pictured) Gaëtan Gianasso, and Michael Colle - Jay Lefkowitz, Kirkland Partner Who Represented Epstein, to Retire from Firm This Spring
- White & Case Hits $3.6bn — And It’s Just Getting Warmed Up
- $11 Million a Partner -The Big Law Pay Story That Makes Every Other Firm’s Numbers Look Modest
Kirkland & Ellis just changed the frame for the entire industry If you write about lawyers for long enough, you make a quiet peace with the gap between your pay packet and theirs. This week, however, Kirkland & Ellis has made that gap feel almost cosmic. Equity partners at the world’s highest-grossing law firm averaged $11.1 million each for 2025 – a 20% increase on 2024. The major money figure places Kirkland’s partners in the earnings bracket of a top Premier League footballer, at roughly £22,500 a day. The firm simultaneously became the first law firm in history to break $10 billion in revenue, posting $10.56 billion for the year. - The Private Equity Lawyer Who Will Run Weil Gotshal
When Weil, Gotshal & Manges announced last week that Ramona Y. Nee will succeed Barry Wolf as Executive Partner from January 2027, the news landed with the quiet inevitability of a deal that everyone saw coming. Wolf, who has steered the firm for 16 years, called her “uniquely suited.” He was not exaggerating. For nearly a quarter-century Nee has been the quiet engine of Weil’s U.S. private equity practice and the beating heart of its Boston office. Now the firm is handing her the keys.
